NEW YORK (TheStreet) -- Weeks after delaying a tender offer valuing Dutch telecom Royal KPN at 7.2 billion euros ($9.7 billion), Carlos Slim Helu's América Móvil said Wednesday, Oct. 16, that it would drop the bid because of opposition from a state foundation.

The Latin American telecom voiced frustration that a foundation established to guard the state's interest effectively squelched its bid, preventing shareholders from acting on the offer. América Móvil shares closed up 88 cents, or 4.17%, to $21.74 on the New York Stock Exchange Wednesday afternoon following the announcement.

The Latin American carrier also owns shares of Telekom Austria Group, and investors may have feared that Slim had greater ambitions in Europe that would put the stock at risk. América Móvil said in August that it would offer 2.4 euros ($3.25) per share for KPN, but in September indicated that it would delay a tender offer until October.

Though it had approval for the deal from the Netherlands Authority for the Financial Markets, Slim's telecom said Wednesday it could not proceed because of friction from the Stichting Preferente Aandelen B KPN, a foundation created when KPN was privatized in 1994.

The foundation exercised an option to acquire nearly a 50% stake in KPN in August, after talks with América Móvil. Slim's telecom said Wednesday that it could not amass a majority stake given the foundation's postion.

"América Móvil believes that KPN requires a strategic partner with operational experience in the telecommunication sector, with sufficient scale and long-term vision, in order to tackle during the upcoming years the significant challenges the European telecommunication sector faces," the carrier said.

Shareholders, not the government foundation, should have decided on the fairness of the bid, América Móvil said. Standard & Poor's and Moody's Investors Service put América Móvil on ratings watch because of the KPN offer.